In just under a month this stock has run from about $6.85 - $7.60. That is highly unusual for this stock and it obviously makes everyone think about if there is an upcoming SPO. So to begin that debate here are some reasons why doing one right now wouldn't make sense:
1. Per the last earnings release they said that the last SPO was taking longer to invest. So to do another one right now wouldn't provide much value.
2. Ex-dividend is only a couple weeks away so why do a SPO right now and be forced to pay a dividend on the new shares with no corresponding income from putting the proceeds to work. The ideal time to do the SPO would be just after Ex-Dividend.
Reasons to do an SPO:
1. The price is above net book value and would be accretive.
2. The yield has slightly expanded since the beginning of the year and it would be good to take advantage.
So let the guessing begin and thoughts would be appreciated.
fwiw, i checked all the NYMT SPOs since 2010. there have been 6 SPOs, and none have been done this close to an ex-date... presuming the ex-date is roughly march 27.
the last SPO on 10/3/12 was done 7 days after the ex-date.
the previous 5 SPOs were done 41, 75, 26, 21 and 91 days prior to the ex-date.
Based on that it seems that history tells us that there won't be an SPO this close to ex-date. I wonder if there comes a point that the price is so high they just have to take advantage and do an SPO no matter how close to ex-date. I think at today's price of $7.58 the stock is about 17% above book value. Other than TWO, I can't think of any other mREITs that high and most are trading right around book value.
I think you are right. However, I am selling next week before xdate. I have to pay taxes on dividends and I have some long tern capital loss to offset capital gains. But I am planning on buying back in after xdate. My only concern is the SO. Will they or won't they?